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TUF subsidy delay stalls powerloom expansion in state

Vinay Umarji  |  Mumbai/ Ahmedabad 

The much anticipated expansion of cotton-based powerlooms in Gujarat by the Powerloom Development & Export Promotion Council (PDEXCIL) has hit a roadblock since almost a year due to delay in the Textile Upgradation Fund Scheme (TUFS).

While PDEXCIL was looking to strengthen the powerloom sector in Gujarat by adding 50,000 more cotton-based looms, the Government of India's delay in announcing a 30 per cent subsidy for the sector has derailed the former's plans. "There are over 500,000 looms in Gujarat, of which 30-35,000 are cotton-based, while rest are synthetic. Hence, last year we had set an ambitious target of adding 50,000 cotton-based powerlooms in Gujarat. But we are still awaiting the 30 per cent subsidy on powerloom as promised by the Centre," said Bharat Chhajer, chairman of PDEXCIL.

The total weaving capacity in the state stands at nine million metres per annum which can cross 10 million metres per annum by such an addition in powerlooms. Moreover, an additional 50,000 looms could give employment to another 25,000 workers in the powerloom sector.

"However, so far only 15,000 looms have been set up while rest are awaiting the 30 per cent subsidy. This has resulted to employment generation of only 6,000-7,000 workers. The delay has also impacted growth of cotton-based powerloom industry in Gujarat despite offering such a huge availability of cotton," said Chhajer.

What's more, the industry body has also been promoting setting up of powerloom parks in the state. "We have been working towards setting up of at least 4-5 powerloom textile parks in Gujarat," Chhajer added.

Meanwhile, according to Chhajer, the expansion would also boost different verticals in the textile value chain in Gujarat. For instance, more number of powerlooms in near future are likely to boost the other verticals in the value chain of textiles like processing. "The growth in powerloom business will boost other verticals including ginning and processing as well. For instance, Ahmedabad alone processes over 200 million metres of grey cloth per day, of which 150 million metres come from South India," he added.

First Published: Tue, December 18 2012. 00:49 IST